The lifting of tariff on imports and exports of goods between China and the ten countries of ASEAN will liberalize billions of dollars in investments in the region, and the move is regarded by Cambodian economists and traders as a big boost for the Asian growth.
The concept of China-ASEAN Free Trade Area, which was formally signed in 2002 in Phnom Penh between the ten Asian countries and China, will become reality on Friday (Jan 1, 2010), providing a greater access to the market of nearly two billion consumers, they said on Thursday.
"This enable trades to flow more freely between China and the ten countries of ASEAN, it is a very good thing," Chan Sophal, President of Cambodian Economic Association, said.
Sophal said the trend would also create more opportunities for the ASEAN countries to increase their intra-trade in the region.
"For Cambodia, we can produce more products and export more to China's market," he said.
Under the agreement, China-ASEAN Free Trade Area would allow the members of ASEAN -- Cambodia, Brunei, Myanmar, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam -- to export their products to China's market at almost no tariff.
Another economist, asked not to be named, stated that under the agreement both sides, which have wide ranges of goods, would be a perfect match that complements each others' demands and that would transform this region to become the world's largest free trade area. China's population is an estimated 1.3 billion, ASEAN has more than 500 million.
Many analysts said if the plan goes smooth as expected the China-ASEAN Free Trade Area would be translated as rival to the North American Free Trade Area (NAFTA) and European Union.
Kaing Monika, spokesman for Cambodian Manufacturer Association in Cambodia, said although Cambodia exported small amount of garment products to China's market, but it is expected that such the trend would attract more investment in the sector for exports.
"This will boost our export to China in the future," Monika said.
Another Cambodia's leading trader and also Senator Mong Reththy said he welcomed the establishment of China-ASEAN Free Trade Area.
He said Cambodia's private banks should release more loans for agricultural sector, which is the country's backbone economy, to produce more products for exports.
"Once Cambodia's products are there, we could share some markets in the future."
China has provided Cambodia the duty free access of 418 items for exporting to China's market.